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1.1 BACKGROUND OF THE STUDY
Sales promotion, a key ingredient in marketing campaigns consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of a particular products or services by consumers on the trade.
Whereas advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for consumer promotion (samples, coupons cash refund offers, price off, premiums, prizes, patronage rewards, free trials, warranties, tie-in promotions, point of purchase, display and demonstration); trade promotion (price off, advertising and display allowances, and free goods); and business and sales force promotion (trade shows and conventions, contests for sales representatives, and specialty advertising). These tools are used by most organisations, including non-profit organisations. Churches for instance, often sponsor bingo games, theatre parties, testimonial dinner and raffles.
A decade ago, the advertising-to-sales promotion ratio was about 60:40. Today in many consumer packaged goods companies, sales promotion accounts for 65 to 75 percent of the combine budget. Sales promotion expenditures have been increasing as a percentage of budget expenditure annually for the last two decade. Several factors contribute to this rapid growth, particularly in consumer markets promotion is now more accepted by management as an effective sales tool; more sales managers are qualified to use sales promotion tools, and product managers are under greater pressure to increase current sales.
Another issue of interest to evaluate is the concept of brand strategy, and this cannot be given a meaning without first explaining the concept of brand. What then is a brand?
The American Marketing Association refers a brand as “a Name, Term, Sign, Symbol, or Design, or a combination of the, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. Thus, a brand identifies the sellers or maker.
Therefore, brand strategy simply refers to scheme or blueprint devised by a firm to market its various product brands and this will depend on whether the product brand is a functional brand, an image brand or an experiential brand.
Penetration on its own, refers to the measure of the degree to which a product or promotion has reached the individuals in a geographic area or market. Hence, brand penetration refers to the measure of the degree to which a brand or product brand has reached the target individual in the target market or geographical area of concern.
Having established the conceptual foundation for the appraisal of this research topic, this research work will therefore be concerned with how sales promotion impact on brand penetration in a competitive market.
1.2 STATEMENT OF PROBLEM
The concepts of sales promotion and brand penetration are not unfamiliar terms in the marketing world. In fact, they go paripasu in the business of marketing, in today’s competitive business world. The fact also remains that sales promotion is aggressively required by businesses in the market environment they operate, if they are to make any meaningful headway in the brand strategies they adopt to make their different product known, distinguished and accepts. In addition to this, the number of brands has increased; competitors use sales promotion frequently; many brands are seen s being similar, and therefore there is the constant need by firms to device their own individual brand penetration strategy, if they are ever going to survive in the highly competitive market Environment.
Haven established these evidences, one would agree that a considerably measure of synergy between sales promotion and brand strategy but what is yet to be more ascertained is how most firms are able to manipulate sales promotion in carrying out their various product brand penetration strategy in the competitive market they operate, and this, therefore forms the essence of this research study.
1.3 STATEMENT OF OBJECTIVE
The objectives of this study are as follows;
1. To ascertain the basic impacts which sales promotion has on brand penetration strategy in a highly competitive market
2. To establish the relationship between sales promotion and brand penetration in a selected number of markets.
3. To ascertain if there is any need for business firms to adopt sales promotion when they are trying to distinguish and make sure their product brands reach their target market.
4. To find out how firms cope with the use of sales promotion in trying to position their product brands in the market environment.
5. To also determine the various product brand categories that business firms can use sales promotion to effectively position, in the highly competitive market environment.
1.4 SIGNIFICANCE OF THE STUDY
The possible significance of this study cannot be over-emphasized as it will attempt to suggest veritable benefits to business firms in the country, of how sales promotion, if strategically carried out, will help them to position and distinguish their various product brands in the highly turbulent and competitive market environment they operate.
Members of the academic Environment, students will also benefit from this research work when it is completed, and this will be in the area of providing them with useful piece of facts that they can draw upon for their own further research findings or studies.
1.5 RESEARCH QUESTIONS
The following will serve as research questions for the purpose of appraising this study;
1. What are the essential differences between sales promotion and brand penetration?
2. What impact does sales promotion exert on brand penetration of product in a competitive market?
3. What is the nature of the relationship between sales promotion and brand penetration?
4. What are the steps involved in carrying out brand penetration?
5. Is there any need for business firms to adopt sales promotion strategies when trying to prioritize their product brands in the market?
6. Are there product brands categories that must be put into consideration by firms before they will decide on the sales promotion step to embark upon?
1.6 RESEARCH HYPOTHESIS
The research hypotheses for this research study are as follows;
Ho: Sales Promotion impacts negatively on brand penetration in a competitive market.
H1: Sales Promotion impacts positively on brand penetration in a competitive market.